Appraisals Versus Lab Reports and Their Benefits
How Appraisals Differ from Lab Reports
An appraisal of a gemstone is an opinion of its value on a certain date and in a specified marketplace, whereas a laboratory gemological report by an internationally respected provider lab does not give the value—it confirms the characteristics of the gem. Appraisals and laboratory reports both state the identity of a gem and indicate if they think it is natural or lab-grown (man-made). Reputable labs and most appraisers include detected treatment information. Despite similarities, appraisals and lab reports are quite different. It’s helpful to understand how they differ and how they can benefit you.
Benefits of Diamond and Colored Gem Reports from Major Labs
I use the term major lab to refer to a lab that conducts research, has high-tech equipment and examines a high volume of diamonds and/or colored gems. In-house labs, such as those belonging to appraisers or jewelers, are not included in this article. Smart buyers and sellers only rely on reports done by independent major gem labs with no connection to the parties in the transaction.
You should get a major lab report for any gemstone of significant value in order to determine if it is natural or lab-grown and how or if it has been treated. More often than not an important value stone is accompanied with a lab report. Check the date on the lab report. It’s best if the date is relatively recent and not several years old. If the report is more than a year old be extremely careful that the condition of the stone meets the clarity grade on the report. As the time since the report grows, there is increasing potential that the stone may have been damaged in some way, even by normal wear and tear. Many buyers of the best gems insist on new reports before making a purchase. It is up to the buyer and seller to meet each other’s terms to get a sale concluded.
Major gem laboratories and their reports offer the following unique benefits:
Reports from major labs carry more weight and authority than appraisals when gems are bought and sold. If you plan to sell an expensive gem on the international market or through an auction house such as Christie’s or Sotheby’s, it should be accompanied by a report from an internationally recognized lab. The report assures consumers of the product they are about to purchase.
Major labs have sophisticated testing equipment that most independent appraisers can neither afford nor know how to operate. The equipment enables the lab’s staff to provide accurate detailed identification reports. Fortunately, the prices of testing devices such as spectrometers have been going down so some appraisers are now able to offer identification services that were previously not possible.
Major labs have greater expertise and more opportunities to examine a wide variety of gems than the average jeweler or appraiser. As a result, they’re more skilled and better equipped to detect enhancements and man-made gems. Some appraisers will only appraise diamonds that are accompanied by a report from a respected major lab.
Major labs are better able to identify fillers used to mask fractures. An experienced appraiser is able to detect most fracture fillings. However, to find out the type and extent of the filler used, the services of a lab are often required. Even labs are not always able to identify the filler or combination of fillers used.
Major labs are more qualified to determine the geographic origin of gems. For important rubies and sapphires, the origin can be a significant price factor. Labs that do origin reports have a complete collection of authentic reference samples, analytical data for mining areas, and equipment, which can provide relevant information such as luminescence behavior, trace elements, infrared characteristics, spectral and optical data. Usually, information about country or region of origin must be requested as an additional service and paid for extra. It’s not a standard part of a colored gem report. Some labs noted for their origin reports are AGL (American Gem Laboratories), GIA (Gemological Institute of America), Gubelin Gem Labs,
Major labs are normally the first to detect new treatments, imitations and manmade stones. In addition, ethical gem-growers and treaters often give major labs samples of new merchandise to examine. Consequently, these labs tend to be more up to date than the rest of the gemological community.
Diamond grading reports like those from the GIA make it easier to sell diamonds online because they give buyers an independent opinion of the diamonds’ quality. Some labs are more respected and stricter than others. One way to find out which labs are the most respected in your country is to ask jewelers there which lab reports they would prefer to accompany a second-hand diamond if they were to buy one from you. Another way to find out about the reputation of labs is to do an online search and see the “chats” about how they compare with other labs. The reputation of a lab is reflected in the asking prices for diamonds accompanied by the reports, all other factors being the same. For example, a one-carat round brilliant G-VS1, excellent cut with a report from a reputable lab can sell for 10-15% more than a diamond with the same specs (e.g., clarity, color, etc.) graded by graded by a less well respected and widely preferred lab. Lab’s with known poor reputations typically assign higher than standard, unmerited grades. Such lab reports are a waste of time and money and will force buyers to offer even a higher discount then the 10-15% mentioned previously
Benefits of Appraisers and Appraisals
Appraisers and appraisals offer many benefits too. Here are the major advantages.
Jewelry appraisers provide a wider variety of reports than major labs. Not only do they evaluate gemstones, they also evaluate the jewelry in which the stones are set. They’ll identify the metal(s) used in the mountings, describe the jewelry mounting, and sometimes discuss the craftsmanship and period and place in which it was manufactured.
Many appraisers will evaluate jewelry in your presence. They may prepare the written appraisal afterwards. Professionals charge a fee for their valuations. In the past, jewelers would sometimes give customers quick verbal estimates of the value of stones or jewelry. That has changed. In the October 2008 issue of Southern Jewelry News, Chuck Koehler, owner of Anthony Jewelers in Nashville, tells about a jeweler who was sued after giving a free verbal appraisal of a diamond ring a customer had bought from the Internet. A few years later, the customer tried to sell the ring and learned that it wasn’t what the paperwork said. The Internet company was no longer in business so the man decided to sue the jeweler, claiming that his buying decision was based upon the opinion of the hometown jeweler. Because of stories like this, Koehler will no longer tell customers if a purchase they made elsewhere is real or fake. He will only look at merchandise from outside his store if people agree to pay him to appraise it professionally.
As for major labs, you normally have to submit or ship stones to them and wait for the lab document. Some labs will not deal directly with consumers.
Jewelry appraisers can act as personal gem consultants. They can advise you on your purchases, gem care and other jewelry-related matters, and they can verify if a stone matches the one on a report. In most cases, major gem labs only provide reports about the item(s) submitted. However, when doing an appraisal, they cannot tell you if a brand name gemstone or jewelry piece is good buy or not. They must simply indicate the brand’s selling price. If you want them to give you their opinion of a branded item, they have to act as a consultant and not an appraiser.
Insurance companies usually require appraisals for expensive jewelry and gems. Up-to-date appraisals are the best due to market fluctuations. It’s also important to keep the invoices for your purchases. Lab reports are primarily used to substantiate the appraisal and invoice data. Many insurance companies do not insure loose gemstones.
In the U.S., the IRS (Internal Revenue Service) requires appraisals to substantiate the value over a certain amount of jewelry or gems that are donated, inherited or otherwise taxable.
The police may require appraisals in theft cases. Appraisals can help you recover lost or stolen jewelry and gems. The more detailed the report, the easier it is to identify your jewelry.
Courts may require appraisals in divorce and probate cases in order to determine an equitable distribution of assets.
Lending institutions may require an appraisal if gems or jewelry are used as collateral for loans. Appraiser Debra Sawatzky saw an appraisal for a bulk of rubies for $2,000,000, which if bought by the pound on e-Bay would cost less than $7000. However, the owner used the appraisal to get a substantial loan. Because of such potential fraud, using gems as collateral is not a universally accepted practice. For example, the Canadian banking system does not allow personal property to be used for loans.
Appraisals often have more information about colored gem quality than lab reports. Unlike most major labs, AGL and AIGS do offer quality reports on rubies, sapphires and emeralds describing both their color and clarity. If you have an insurance replacement policy, detailed information about the quality can ensure that your gemstone or jewelry piece is replaced with one of equivalent quality.
The color description of gems is often more precise on high quality appraisals than on most lab reports because top-quality appraisers use a color reference system(s) to describe the color, instead of simply stating that a stone is, for example, blue or maybe royal blue. Due to the nature of colored stones, there is no universal system for grading colored stones, as there is for diamonds.
In summary, gem appraisers offer consumer-friendly, personalized, convenient valuation services and a wide variety of information on their appraisals.
2020 by Renée Newman
© Copyright 2020 by Renée Newman
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